This blog has been moved to www.nordborg.ch. I am looking forward to continuing the discussion there.
This blog has been moved to www.nordborg.ch. I am looking forward to continuing the discussion there.
Why we need a consumer strike to save the world
Our planet is doing miserably. Whether we consider the loss of biodiversity, the acidification and pollution of the oceans, or climate change, the signs are alarming. We are about to destroy the only habitable planet in the known universe, making it unsuitable for human existence. Why?
This is a perfectly relevant question. After all, there are currently no external threats to our planet. The sun is still shining and we are not being attacked by aliens. We also know exactly what is causing the problems and what is needed to solve them. In spite of this, humanity has decided to continue down the path of self-destruction.
To understand what is going on, it is useful to consider the correlation between global carbon emissions (CO2) and gross domestic product (GDP). The figure below shows the historic data on global GDP (blue) and CO2 emissions (red) from 1960 to 2015 as solid lines. To say that these two curves are strongly correlated is somewhat of an understatement: the correlation coefficient turns out to be +0.99, where a value of +1 represents perfect correlation. In other words, economic growth in the past was entirely based on our ability to extract more fossil fuel from the ground. Using more energy made us richer, and being richer allowed us to consume more.
Carbon emissions and global GDP. Historic data provided by the World Bank (data.worldbank.org)
Now consider the future. The dashed blue line represents G20 target of 2% annual economic growth. On the other hand, climate scientists tell us that we need to reduce CO2 emissions by at least 5% per year to have any chance of staying below +2°C global warming. This reduction is indicated by the dashed red line. Clearly, the two curves pose an important question:
Is it possible to prevent catastrophic climate change without significantly reducing the size of the global economy?
Most likely, the simple answer is no. What is very worrying, however, is that we are not even allowed to ask the question. No politician – left or right – seriously advocates lowering GDP to save the environment. Rather, they either deny the existence of the problem outright or team up with large corporations in hoping for an energy miracle through research and technological development.
In 1633, Galileo Galilei was sentenced to house arrest by the Inquisition for claiming that the Earth revolves around the Sun. People tend to forget that there were very good reasons for this. The power of the Catholic Church was based on its absolute monopoly on the truth and allowing the inquisitiveness of scientists would have been bad for business. For the church, asking questions was already a crime.
Today we are facing a similar situation, with the infallibility of the Pope replaced by the Washington Consensus. We know that economic growth cannot go on forever and that we are already using too much of the world’s non-renewable resources. We also know that the GDP is a very flawed measure of human well-being, which “measures everything except what is really important” as Robert F. Kennedy put it. Nonetheless, governments worldwide continue to fight for economic growth with an almost religious fervor. For lack of better ideas, they keep feeding the monster that is growing up to kill us all.
The reason is again very simple: capital income is directly related to economic growth as measured by the GDP. As long as the economy is growing, we can define a risk-free rate of interest, meaning that anyone with access to capital is entitled to an income. With zero growth, money would not grow, making investing a zero-sum game. With negative growth, the financial sector would be completely pointless.
Economic growth also allows us to perform other miracles, such as discounting the future. One argument against dealing with climate change now is that future generations will be so much richer than we are and will therefore be able to deal with the consequences. To put this in more technical terms, if the discount rate is high enough, the net present value (NPV) of future environmental costs can safely be ignored.
Unfortunately, climate change is not a financial problem but a real one. It is time to forget about profits and money and start caring about the future of humanity. After all, you do not negotiate the water price when your house is on fire. Currently, no nation in the world has a credible strategy for dealing with the problem. The reason is that their governments have tried to square the circle by promoting economic growth while trying to stop climate change. Unfortunately, this is physically impossible. Unless we are willing to lower our consumption and the size of the economy, we will not be able to prevent an environmental disaster. The damage we are doing to the Earth’s ecosystem is directly proportional to the size of the economy. To put it bluntly: one cannot eat more and shit less.
Miraculously, as soon as we drop the demand for economic growth, all the problems and contradictions vanish. It is very simple to lower our impact on the Earth’s environment by driving less, flying less, consuming less, and eating less meat. A global carbon tax (www.giseco.org) would ensure that those destroying the environment would pay for the damage and would automatically lead to less waste. The rising energy price would trigger inflation, thereby solving the problem of wealth inequality. It would also stop the trend of replacing humans with machines and robots. Suddenly, honest human work would be appreciated again.
Fortunately, global capitalism has painted itself into a corner through excessive greed. According to the IMF, global debt now amounts to 215% of the world’s GDP. In other words, the global financial system is essentially bankrupt. In order to maintain the illusion that the money will someday be repaid, very high economic growth is required. The other options, such as high inflation or debt relief, would be very painful for the banks.
What would happen if consumers worldwide went on strike and refused to buy more stuff? This would be perfectly doable and legal. Nobody can force you to go shopping and you probably have enough stuff at home that you do not have to. Once you get used to not shopping, it turns out to be very relaxing. You have more time for yourself, family, and friends, and you have more money left at the end of the month. By not shopping and not travelling, you also contribute directly to saving the environment and you get to keep the money you do not spend.
If enough of us participate in a consumer strike, it should be possible to bring the world economy into recession. A reduction of global GDP by 5% would break the power of big business and force governments to do the right things. Suddenly, it would not be possible to continue with business as usual anymore. In addition, it would reduce CO2 emissions by 5%, which is exactly what we have to do anyway.
Is this a radical idea? In December 2015, 197 countries came together to pass the Paris agreement on climate change. It is now obvious that no country on Earth is taking this document seriously. The reason for this failure is fundamental: rather than asking how we can maintain economic growth while protecting the environment, we should ask how we could reduce the size of the economy while maintaining a decent quality of life.
Consumers of the world, unite! If you care about the planet and the future of your children, stop shopping! It is good for you, for the environment and would lead to the required changes of the political system and the global economy.
Ich lade Sie herzlich zu folgendem Vortrag ein:
Wie stoppen wir die Klimaerwärmung? Eine Anleitung in 4 Schritten
Ein Vortrag für alle, die eine Zukunft haben wollen und bereit sind, etwas dafür zu tun.
(Dr. sc. Nat. ETHZ) HSR
Zeit: 10. Mai 2017, 18:00
Ort: ETH Zürich, HG F5
Flyer zum ausdrucken und verteilen: Klima ETHZ 2017 Flyer
Modern houses are remarkably comfortable. Despite huge fluctuations in outside temperatures, they manage to keep a pleasant temperature inside. The reason for this is an invention called the thermostat, which measures the temperature in the house and compares it with the desired value. If it is too cold, it turns the heat on. Otherwise, it turns it off.
A thermostat is just one example of a control system providing a simple solution to a difficult problem. The general idea is illustrated in the figure below. The black box represents the house, which is actually a very complex physical system. The required heating depends on the outside temperature, wind speed, cloud cover, the number of people inside, how often the doors are being opened, and a number of other factors. It is simply not possible to predict how much heat is going to be required in advance. The control system solves this problem by measuring the actual temperature and providing feedback to the heating system. It suddenly becomes possible to control the temperature without detailed knowledge of the black box.
The Earth’s climate and the global economy are both very complex system. Anyone who believes that we can understand them in detail in order to be able to calculate the optimal response to global warming is delusional. It therefore makes no sense to compare the “cost” of preventing global warming to “economic damage” resulting from climate change, as we can compute neither of the two with reasonable accuracy. We are therefore suffering from paralysis by analysis: We refuse to act because we believe that we do not have sufficient information. The problem is that we will never have enough information.
What we do know for certain, however, is that continuing CO2 emissions will lead to higher temperatures. We also know that the most efficient way to regulate these emissions is through carbon pricing or a carbon tax. An automatic taxing mechanism, as proposed by GISEco, would work like the thermostat in the house and adjust the tax level to produce the correct output for the climate and the global economy. The principle is illustrated below:
The beauty of this concept is that it is effective, easy to implement, and risk free. Everyone agrees that a simple carbon tax is the most efficient way to control CO2 emissions. The administrative effort to introduce the tax is very low and it can easily be adjusted to provide the right outcome for society. Furthermore, it would make every human on the planet part of the solution: We all dislike paying taxes and could do so by reducing our energy consumption. To argue that such a system would not work is like denying the existence of thermostats.
The climate of the Earth has now entered unchartered territory. The last time it was this hot was probably 100,000 years ago and modern humans had not yet left Africa. In fact, we have allowed the situation to deteriorate so far that the survival of humanity seems to depend on future generations inventing some hitherto unknown carbon capture mechanism, despite the fact that this violates the second law of thermodynamics (please send me an e-mail if this is unclear).
We know that that our current approach of dealing with climate change through non-binding international agreements does not work. We also understand why this is so and what would actually be required to stop global warming. A global carbon tax would remove most of the uncertainties for investors and politicians, forcing them to take action. Opposing it makes about as much sense as trying to design a good heating system for a house while opposing thermostats on ideological grounds.
A quarter century after the world decided to solve the problem of global warming in 1992, the carbon dioxide (CO2) concentration of the Earth’s atmosphere has increased from 356 ppm to over 400 ppm and annual emissions have risen by 55%. Simultaneously, temperatures have increased and biodiversity has decreased. There are far fewer wild animals today than 25 years ago and humanity’s global footprint now stands at 1.6 Earths, moving the global overshoot day to August 8 in 2016. Whatever politicians have been doing to prevent global warming and environmental destruction since 1992, it has not worked.
The reason for this failure is obvious. The graph below shows the global CO2 emissions and GDP since 1965.
It is impossible to deny the fact that the two curves are strongly correlated. Actually, the correlation coefficient turns out to be +0.976, where a value of +1 would denote perfect correlation. This should come as no surprise. To begin with, GDP measures economic activities, such as manufacturing, transportation, and travel, which all require energy. On the other hand, increasing wealth allows us to consume more and travel more. The causation works both ways: increasing energy demand leads to higher GDP and a higher GDP leads to an increase in energy demand. As long as 86% of our energy is provided by fossil fuel, we should expect a strong correlation between GDP and CO2-emissions, as is indeed the case.
Apparently, by promoting economic growth through trade agreements and deregulation, our politicians have actually been boosting global warming. There is, as Naomi Klein and others have pointed out, a fundamental conflict between our economic system and the laws of nature. It is also clear that we can only change the economic system.
In order to limit global warming to below +2°C, as was decided in the Paris agreement in 2015, global emissions of CO2 would have to decrease by at least 5% annually. Graphically, this looks like the green curve in the graph below.
It is simply delusional to believe that such a strong reduction is possible while maintaining economic growth as measured by GDP. It would require a correlation coefficient closer to -1 than +1, i.e. that people consume less as they get richer. Unfortunately, our political leaders do not understand this but are senselessly trying to boost economic growth.
The good news is that – contrary to common belief – the correlation between GDP and quality of life or prosperity is not very strong, at least not for rich countries. Again, the reason is easy to understand: once our basic material needs have been taken care of, more wealth does not necessarily lead to greater happiness. Having access to sufficient food is enormously important, having access to 10 times more food does not have any discernible benefits. This effect has been demonstrated in a large number of studies and the TED talk by Michael Green is a good place to start.
Currently, politicians all over the world are chasing their own tails. If GDP and CO2-emissions are almost perfectly correlated, one cannot increase one while decreasing the other. Unless we accept this simple truth, we will never be able to stop global warming.
Humanity is facing an unprecedented challenge. Resolving it will require courage, ingenuity, and determination. The first rule of innovation is not to prematurely exclude any possible solutions. By refusing even to discuss any ideas which could negatively impact the GDP, we limit ourselves to looking for purely technical solutions to a political and economic problem. Why are we prepared to sacrifice everything we love in order to increase an abstract number, invented and computed by economists, with no obvious connection to our well-being?
A simple solution would be to abolish the GDP altogether, as has recently been discussed by many leading economists. It is redundant, being completely correlated to CO2 emissions, and it is not even useful, as it does not measure human prosperity or well-being. There is no contradiction between improving people’s lives and reducing greenhouse gases. The contradiction only appears when GDP is taken into account.
Another option is to ensure that the GDP actually measures the right thing, which is most easily achieved by putting a price tag on non-renewable resources. A global carbon tax would make it preferable to avoid using fossil, leading to massive investments in renewable energy and energy efficiency. It would also give people an incentive to travel less, eat less, and consume less, which would all be good for the planet. It would probably also be bad for the GDP, but who cares?
It is probably not too late to stop global warming. All we have to do is to get our priorities right and focus on effective solutions. You do not negotiate water rates when your house is on fire! Likewise, we should not be haggling over the cost of doing something we all know needs to be done. The economic cost of stopping global warming is not even a relevant parameter. What a liberating idea that is!
 Data on the CO2 emissions and concentrations from the Carbon Dioxide Information Analysis Center (http://cdiac.ornl.gov) and from BP (www.bp.com). Data on GDP from the World Bank (http://data.worldbank.org/indicator/NY.GDP.MKTP.CD)
 See e.g. WWF Living Planet Report 2014 (http://wwf.panda.org/about_our_earth/all_publications/lpr_2014/)
 The same sources as in .
 Many researchers quote a higher number, such as 6-8%
In this case, it would have been better if the predictions had been wrong.
In 1981 James Hansen and colleagues published research in the prestigious peer-reviewed journal Science titled “Climate Impact of Increasing Atmospheric Carbon Dioxide.” They discussed the result of basic physics, that carbon dioxide in the air inhibits Earth cooling off, thus heating the planet. They also reported the results of computer simulations of Earth’s climate in a world with ever-increasing CO2.
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Many of you probably saw the temperature spiral created by Ed Hawkins at the University of Reading. Here, I have created my own plot to show the dramatic changes happening to the Earth’s climate. Starting from publicly available data provided by NASA, I have plotted the monthly temperature anomalies for a number of years: 1931, 1967, 2003, 2105, and 2106.
My father was born in 1931 and worked with agriculture all his life. To him, it is obvious that the climate has changed dramatically during his lifetime. I was born in 1967 in a climate fairly similar to that of my father. In 2003, Europe witnessed a massive heat wave, killing up to 70’000 people. The hottest year on record was 2015 but it will soon be replaced by 2016. As Jimmy Kimmel put it: “We know that we have a problem when every year is the warmest year on record”.
In other words, the climate is changing, it is changing fast, and it is changing now. The problem is that humanity still depends on fossil fuels for 86% of its energy supply. Renewables only account for 2.2% (source BP Statistical Review of World Energy)
Despite all positive developments in the area of renewable energy, the rate of change is still far too slow. This is why a global fee or tax is necessary.